Friday, August 2, 2013

Explanation of the OMB Review of the NSPS

Explanation
of the Office of Management and Budget Process for the Wood Heater New Source
Performance Standard

Prepared for the Alliance for Green Heat by the law firm Van Ness Feldman, LLP

Introduction

On July 26,
2013 the U.S. Office of Management and Budget (OMB) received for review the Standards
of Performance for New Residential Wood Heaters, New Residential Hydronic
Heaters and Forced-Air Furnaces, and New Residential Masonry Heaters
(hereinafter referred to as the “Wood Heater NSPS”). The following discussion explains the role of
OMB in the rulemaking process and notes some specific information about the
Wood Heater NSPS page on OMB’s website, which can be found here: http://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201304&RIN=2060-AP93.

Background on the OMB Process

The
particular section of OMB that reviews significant draft regulations is called
the Office of Information and Regulatory Affairs (OIRA). OIRA reviews rulemakings to determine whether EPA
has considered various alternatives as well as to ensure coordination between
federal agencies to avoid inconsistent, incompatible, or duplicative policies. OIRA reviews approximately 500-700 rules a
year. OIRA can “return” a rule to the
drafting agency for further review if it finds that the proposal is deficient. Often such a process occurs when an agency has
not sufficiently examined alternatives in the proposed rule. OIRA also can suggest that changes be made to
a rule before it is released in final form.

The process
of regulatory review is designed to help improve the rulemaking process and
create coherent policies across all the agencies of government. The OMB website notes, “Regulatory analysis
is a tool regulatory agencies use to anticipate and evaluate the likely
consequences of rules. It provides a
formal way of organizing the evidence on the key effects – good and bad – of the
various alternatives that should be considered in developing regulations. The motivation is to: (1) learn if the benefits of an action are
likely to justify the costs, or (2) discover which of various possible
alternatives would be the most cost-effective.” http://www.whitehouse.gov/omb/OIRA_QsandAs/.

OMB is
required to review a rule within 90 days, but there is no minimum period for
review. The head of the rulemaking
agency may extend the review period. In
addition, the Director of OMB also has the ability to extend the review, but
not by more than 30 days. http://www.whitehouse.gov/omb/OIRA_QsandAs/. In practice, however, OMB sometimes takes far
longer than 90 days to review a rule, and in rare cases rules can stay at OMB
for years. If the Executive Branch does
not want to finalize a rule, it can instead leave it marooned at OMB. Thus, it is best to think of 90 days as a
general rule of thumb from which OMB sometimes deviates, although legally they
are required to act within the 90 day review period unless an extension is
received.

Information on Wood Heater NSPS Process

As noted
earlier, the Wood Heater NSPS was received by OMB for review on July 26th. In addition to the general process explained
above, there is some specific information about the Wood Heater NSPS that is
helpful to understand when consulting the page on the OMB website which tracks
rules.

First, note
that “NPRM” stands for “Notice of Proposed Rulemaking.” The date for the NPRM listed on the OMB page
is September 2013. This is the
aspirational date for EPA to release the proposed rule after OMB review. There is no settlement agreement pursuant to
which EPA is required to release the Wood Heater NSPS by a particular date. Given that the rule went to OMB in late July,
it is possible that the deadline will slip and the rule will not be released
until late October or November if OMB takes the whole 90 day period to review
the rule.

EPA’s
website lists the publication date for the Notice of Proposed Rulemaking in
November, not September. http://yosemite.epa.gov/opei/rulegate.nsf/byRIN/2060-AP93.
It is likely that it will take several
weeks after the release of the pre-publication version of the rule before it can
be published in the Federal Register.
Therefore, if the pre-publication
version is released in late September, in may not be published in the Federal Register until November 2013. Publication will set the time frame for
public comment.

The date listed
for the final rule, November 2014, is similarly a statement of when EPA would
like to release the final rule, which includes time for responding to comments received
on the proposed rule. Again, because
there is no litigation over EPA’s delayed timing for this rulemaking, this date
also is aspirational. While EPA’s listed
date means that the Agency has every intention of hitting this marker, it does
not always happen. It is not possible to
say precisely how easy it is to push back the date, other than to note that there
are no litigants or a presiding court with which to negotiate, and thus there
is much about the timing that is within the Agency’s discretion. It is important to point out that the Agency could
always be sued for delay in issuing its revised NSPS, and if the litigants
prevail, a more truncated schedule for the rulemaking may be set by a
settlement agreement.

In addition
to the dates for the proposed and final rules, some of the terms listed on the
OMB page are helpful to understand. First,
it states that “the statutory final rule deadline is not driving the schedule
for this action” and lists “2/26/1996” as the date for the statutory deadline. This is because under the Clean Air Act, EPA
is required to update the NSPS every eight years. The last time the Wood Heater NSPS was amended
was 1988. Thus, technically, the
standards were required to be reviewed in 1996, which means the Agency has
fallen woefully behind its schedule for updating the rule. Consequently, the page correctly notes that
the statutory deadline is not “driving the schedule” for this action.

The page
also has a notation that states “small entities affected: businesses.” The listing in this document is not a
conclusion, but just a required statement.
As the EPA’s website explains, “EPA notifies the public when a
rulemaking is likely to 1) have any adverse economic impact on small entities
even though a Regulatory Flexibility Analysis may not be required and/or 2)
have significant adverse economic impacts on a substantial number of small
entities. http://yosemite.epa.gov/opei/rulegate.nsf/byRIN/2060-AP93#2. Thus, this listing puts the pubic on notice
that small businesses may be impacted by this rulemaking proceeding and that
the appropriate small business analyses will be conducted.

Further,
the page includes the notations “priority: economically significant” and
“unfunded mandates: no.” Like the small
entities notation, these are both required to be disclosed to the public. A
rule is economically significant if it has potential economic impact of $100
million or more per year, or could “adversely affect in a material way the
economy, a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal governments or
communities.” http://www.reginfo.gov/public/jsp/Utilities/faq.jsp. Economically significant rules require a more
extensive review of the costs and benefits.
The notation that there are no unfunded mandates denotes that the rule
does not impose large burdens on state, local, or tribal entities without
providing the resources to carry out those responsibilities.

Substantive Description of the Wood Heater NSPS

In addition
to the items above, the OMB page includes a description of what is to be
included in the rulemaking. First, it
should be noted that this description holds no legal weight and is just an
attempt to summarize what will be in the rule. Specific terms include:

·That the rule will “reflect significant
advancements in wood heater technologies and design;”

·“This rule is expected to require manufacturers
to redesign wood heaters to be cleaner and lower emitting;” and

·“[S]treamline the process for testing new model
lines by allowing the use of International Standards Organization
(ISO)-accredited laboratories and certifying bodies, which will expand the
number of facilities that can be used for testing and certification of new
model lines.”

Each of these terms explains what is
expected to be in the rule; however, this summary is purely descriptive and is
not binding on the Agency. The
description simply represents what EPA was willing to put forth as a summary of
the rule’s contents. The text listed on
the OMB site is the same as the abstract found on EPA’s website regarding the
proposed rulemaking. http://yosemite.epa.gov/opei/rulegate.nsf/byRIN/2060-AP93#2. The description is meant to inform the public
about the possible changes in the current NSPS, but EPA’s website includes a
disclaimer which notes, “The information on this site is not intended to and
does not commit EPA to specific conclusions or actions. For example, after further analysis, EPA may
decide the effects of a rule would be different or it may decide to terminate a
rulemaking.” http://yosemite.epa.gov/opei/rulegate.nsf/byRIN/2060-AP93#2.